Success stories

Dad’s Sudden Departure Leaves Rob Unprepared

The Challenge

After the sudden death of his father, Rob found himself in the difficult position of helping his mother, Rose, adjust to life without her husband, personally and financially. Rose and her husband had drafted estate plan documents decades ago and though they had made updates to include assets over the years, the plan didn’t adequately address the current situation in which Rose found herself. The trust was set as an A/B trust, which left Rose without access to much of the estate while improperly titled assets created other difficulties. This meant Rob and Rose, already struggling with a great loss, were spending countless hours and emotional anguish in probate courts and lawyers’ offices trying to clear things up.

The Goal

Rob wanted to ensure that his children would never be in the position of having to deal with lawyers, probate, or any other unforeseen challenges he could otherwise prevent. At 45, Rob had not considered the need for an estate plan, but having learned the hard way, he was not going to rest until he knew his children would not only be taken care of financially but would not have to mourn a loss and fight a court battle when such a time arose.

The Solution

Rob and his wife, Sarah, consulted with their Summitry advisor to discuss the many personal decisions that they would need to make to properly document their wishes in the event that one or both of them became incapacitated.  Though neither wanted to think about their own mortality just yet, drafting a plan that carefully identified how assets would be distributed to their teenage and young adult children was of paramount concern. Discussions around providing for the children in the case of an unexpected event led to discussions about how to transfer assets to their children over time reducing some estate tax exposure. Initiating some gifting strategies now, such as the creation of a grantor trust paired with maximum annual gifting exclusions, can have vastly different outcomes than if the couple started in 15 or 20 years. In their case, they created a $5 million intentionally defective grantor trust, allowing the tax-efficient transfer of assets to their children reducing their projected estate tax bill by over $1 million. With the groundwork laid, we liaised with our estate planning partner to help Rob and Sarah document their wishes. Together, the couple and their Summitry advisor will revisit the plan annually or as changes in life and laws warrant to ensure their estate plan is accurate and up to date.

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*Actual client situation with the names changed for privacy. Please see disclaimer below.

This case study contains an actual client situation with the names changed in which Summitry has provided financial planning advice. There is no guarantee that similar results will be achieved for other financial planning clients. It is unknown if the clients on which this case study is based approved or disapproved of Summitry's services. Summitry's advice is based each client's specific situation and contains multiple factors. Summitry may make recommendations to one client that may differ from the advice given to another client. Summitry may suggest strategies that require legal services to implement, but Summitry does not provide legal advice.

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